Targets and Inflation Dynamics

Brazil has experienced crucial changes in its inflation process since the adoption of inflation targeting in mid 1999. This article addresses changes in the analytical framework employed to track the inflation dynamics, specifically the relevance of an explicit target for inflation. A New-Keynesian Phillips curve (NKPC) is derived incorporating indexation not only to past inflation but also to inflation targets, generalizing the Woodford (2003) hybrid curve. In our modeling, firms that do not optimally set their prices in a given period adjust them only by indexing their previous prices to a weighted average of the inflation target and lagged inflation. In such a framework, the impact of inflation targets on agents' decisions regarding the supply side can be analytically measured by the parameter associated to the inflation target. It is shown that inflation target affects the welfare-based monetary policy objective function by penalizing deviations of actual inflation from target instead of from zero. This result establishes the micro foundation basis for ad-hoc loss functions as indicated in traditional literature. Therefore, the inflation target also affects the optimal target criterion. We also present a microfounded specification to model inflation expectations, and conclude that when firms attribute a high weight to the government's inflation target when setting their own prices, exchange rate and demand shocks are unable to alter significantly inflation expectations. Such a result gives some light to empirical ad hoc assessment conducted in traditional literature. Our empirical evidence shows that even after major shocks, the target ability of anchoring inflation has been restored. Although not formally tested, such a fact followed the monetary authorities' firm commitment to meet the inflation targets, reinforced by the government's necessary support through a consistent fiscal policy.

Transaction costs arising from breaches of legal contracts - The case of judicial breaches of contracts of anticipated sale contracts of soybeans in Brazil.

Anticipated sales of commodities reached a significant importance in modern economics. They represent the main mechanism of economic exchange and of guarantee of fulfilment of mutual obligation commitments. In Brazil, the anticipated sale of commodities is one of the main funding mechanisms of agribusiness, particularly for commodities like soybeans and corn. In this scheme, part of the production is bought and paid by the buyer during planting of the crops. Contracts are instruments designed to ensure greater legal certainty to economic transactions. Efficient economies are governed by rules of public and private character, but private arrangements have special focus on these scenarios, and its efficiency is directly proportional to the degree of reliability in fulfiling obligations. Brazil?s agribusiness is one of the economic sectors most susceptible to the effects of judicial decisions, because it is also highly regulated in comparison to other areas like trade and services

Optimized cross-slot flow geometry for microfluidic extension rheometry

A precision-machined cross-slot flow geometry with a shape that has been optimized by numerical simulation of the fluid kinematics is fabricated and used to measure the extensional viscosity of a dilute polymer solution. Full-field birefringence microscopy is used to monitor the evolution and growth of macromolecular anisotropy along the stagnation point streamline, and we observe the formation of a strong and uniform birefringent strand when the dimensionless flow strength exceeds a critical Weissenberg number Wicrit 0:5. Birefringence and bulk pressure drop measurements provide self consistent estimates of the planar extensional viscosity of the fluid over a wide range of deformation rates (26 s1 "_ 435 s1) and are also in close agreement with numerical simulations performed by using a finitely extensible nonlinear elastic dumbbell model

Electron-scale shear instabilities: magnetic field generation and particle acceleration in astrophysical jets

Strong shear flow regions found in astrophysical jets are shown to be important dissipation regions, where the shear flow kinetic energy is converted into electric and magnetic field energy via shear instabilities. The emergence of these self-consistent fields make shear flows significant sites for radiation emission and particle acceleration. We focus on electron-scale instabilities, namely the collisionless, unmagnetized Kelvin-Helmholtz instability (KHI) and a large-scale dc magnetic field generation mechanism on the electron scales. We show that these processes are important candidates to generate magnetic fields in the presence of strong velocity shears, which may naturally originate in energetic matter outburst of active galactic nuclei and gamma-ray bursters. We show that the KHI is robust to density jumps between shearing flows, thus operating in various scenarios with different density contrasts. Multidimensional particle-in-cell (PIC) simulations of the KHI, performed with OSIRIS, reveal the emergence of a strong and large-scale dc magnetic field component, which is not captured by the standard linear fluid theory. This dc component arises from kinetic effects associated with the thermal expansion of electrons of one flow into the other across the shear layer, whilst ions remain unperturbed due to their inertia. The electron expansion forms dc current sheets, which induce a dc magnetic field. Our results indicate that most of the electromagnetic energy developed in the KHI is stored in the dc component, reaching values of equipartition on the order of $10^{-3}$ in the electron time-scale, and persists longer than the proton time-scale. Particle scattering/acceleration in the self generated fields of these shear flow instabilities is also analyzed

Transverse electron-scale instability in relativistic shear flows

Electron-scale surface waves are shown to be unstable in the transverse plane of a shear flow in an initially unmagnetized plasma, unlike in the (magneto)hydrodynamics case. It is found that these unstable modes have a higher growth rate than the closely related electron-scale Kelvin-Helmholtz instability in relativistic shears. Multidimensional particle-in-cell simulations verify the analytic results and further reveal the emergence of mushroom-like electron density structures in the nonlinear phase of the instability, similar to those observed in the Rayleigh Taylor instability despite the great disparity in scales and different underlying physics. Macroscopic ($\gg c/\omega_{pe}$) fields are shown to be generated by these microscopic shear instabilities, which are relevant for particle acceleration, radiation emission and to seed MHD processes at long time-scales